WORLD AFFAIRS.

Lake Wakatip Mail, Issue 4329, 31 August 1937, Page 3

WORLD AFFAIRS.

NOTES AND COMMENTS ON THINGS THAT MATTER. DEVELOPING CHINA. Interesting light on some of the •factors influencing Japan’s policy in China, which has led lap to the present outbreak of hostilities, isl thrown by a recent world trade review. There is one Large area of the world which Is tin (urgent need of economic development and could, if it were once opened up, provide an elasticity of markets which would make the protection of existing markets appear far less desirable That area is China:. TRADE POSSIBILITIES. If its means of communication could be improved and other necessary capital developments carried out, the result would be a Large increase of productivity per head. The consequent rise in real income would provide a new and expanding market for cheaper textiles and other industrial products. Tills, in the opinion of the Bank of New South Wales, from whole review these extracts are taken, would be the great shock absorber for the industrial expansion of Japan and would reduce the impact of Japanese competition in a number of either markets. The great obstacle to this development is political distrust. Japan fears that if she allows other countries to carry out the economic opening up of China, they will obtain political control. She, therefore, has opposed the development of China by other countries, although she could not carry it out herself. SUSPICION OF EUROPEAN POWERS. There are good reasons for tills political suspicion of Japan, because in the past the European powers! have usually demanded political concessions as part of the price tax* their economic aid to China. Furthermore, Japan knows that her geographical position in the world and her differences in business methods and production costs make it very difficult for her to bargain effectively with the great international trusts) of Europe and America. In addition, Japan has seen what the great industrial powers of the world do when they obtain control of any area of the world by undertaking its capital development. The French Empire regulates to the minutest detail the trade of other countries with her Colonial Empire. Even when Britain maintained the policy of the Open Door in her Colonial Empire, it was practically unheard of' for .any but a British firm to obtain a government contract, and as the great bulk of development work was financed by goveimment expenditure, this 'meant that much remunerative trade with “third parties” was excluded. DRIVING HARD BARGAINS. Moreover, in the recent past Great Britain has reduced the widening trade of Japan with licr Colonial Empire by imposing a quota system based upon quantities imported in a period before Japanese exports had developed. Japan, therefore, has felt obliged to drive hard bargains before foregoing her “dog in the manger” policy in China. There is, therefore, a political stalemate which had held up -the progress of China and prevented world trade from benefltting from the stimulus winch the opening up of a new great area could give. Such a stimulus, like the opening up of undeveloped areas in the pre-war period, would react favourably upon world trade everywhere.